Leadership: Vigilantism 2.0

Imagine that you’re the CEO of a Fortune 500 company, running a multi-billion dollar organization with its many moving parts. One day your Google alert shows an article stating that your company’s operations in Asia are employing child labor, with young children working long days in harsh conditions. By the next morning there are 62 articles and 305 mentions of this story. By afternoon there’s a Facebook boycott with 10,000 fans. The Twittersphere has lit up with Tweets and hashtags like #slavelabor, #boycott, and #savethechildren–terms that are now unfortunately tied to your brand. You’ve been “Inter.outed,” a term used to describe how a company is “outed” on the Internet for doing very bad things.

We’ve all heard the horror stories about how brands can be derailed through negative social media. Remember the Domino’s Pizza nose-picking YouTube video, and “Motrin Mommies” digital disaster? Recently, The Gap was caught with its khakis down in a logo design backlash. In less than 48 hours of social pressure, the Gap withdrew its new logo. There are also more serious examples. Whole Foods suffered a Facebook, Twitter, Flickr, and YouTube boycott as well as bloggers who labeled them “A-Hole Foods” after the CEO stated that not everybody deserves health care. BP now has a worldwide Facebook boycott of more than 600,000.

While these boycotts can damage a brand, until now business has not yet experienced the full force of Internet vengeance. There exists certain lawlessness on the Web, and individuals are only starting to understand the mighty influence they wield when they mass together in groups. Internet communities are still in their infancy, and users have yet to grasp the full depth of the power they have on the Web.

The New York Times reported on “cyberposses” in China, who dole out online vigilante justice by hunting down and punishing people. Internet vigilantism is often activated not for illegal behavior, but for socially reprehensible behavior. “The Kitten Killer of Hangzhou,” for example, became the target of cyber sleuths who tracked her down and outed her. She lost her job, her apartment, and was made to leave town.

It’s not much of a stretch to imagine that Internet vigilantism will soon cross over from individuals to organizations. Social activists use every media channel available to express disapproval for unfair or dishonest business practices. Users could easily turn to online vigilantism to punish companies that have attracted their wrath. The web is a great repository for track records, and has a long memory. If resentment over exorbitant Wall Street bonuses juxtaposed against illegal housing foreclosures ever boils over, vigilante groups could easily launch cyber-attacks on the banks they deem responsible. If a company employs sweatshop labor, is toxic to the planet, or mistreats its employees, tech-savvy users can crash servers, take down websites, and disrupt e-commerce business. Moreover, they can wage a ferocious battle for the hearts and minds of consumers to damage brand reputations.

So what is a CEO to do?

In this brave new world, CEOs need to prepare for the era of total transparency. Here are five steps a company can take to protect itself by strengthening its relationship with stakeholders:

• Clean house. Make sure your company is acting in good faith with customers, partners, and suppliers.

• Examine the supply chain, and make sure you are in compliance with all environmental and employee issues.

• Humanize your brand. Use Twitter, LinkedIn, and blogging to address issues directly, take user concerns seriously, and respond quickly and thoughtfully with no marketing spin.

• Always tell the truth.

On the web, all transgressions are trackable, and no corporate misdeed will ever be forgotten. Companies must embrace the new culture of transparency for survival, since Netizens are willing to fight hard for anything they believe in–even if it’s just a logo.

Ann Charles is CEO ofBRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.